BERLIN, Feb. 23 (Xinhua) -- Germany's gross domestic product (GDP) in the fourth quarter (Q4) of 2023 fell by 0.3 percent compared to the previous quarter, according to results published by the Federal Statistical Office (Destatis) on Friday.
For the full year, German economic output shrank by 0.3 percent year-on-year. "The German economy ended 2023 in negative territory," said Destatis President Ruth Brand. "In the final quarter, declining investment had a dampening effect on economic activity, while consumption increased slightly."
Destatis said that capital formation slowed the economic performance of Europe's largest economy. Fixed capital formation in construction was down 1.7 percent quarter-on-quarter, while gross fixed capital formation in machinery and equipment even recorded a decline of 3.5 percent.
Consumer spending by private households, on the other hand, recovered over the year and rose slightly by 0.2 percent in Q4. Government final consumption expenditure was also up slightly.
Consumer sentiment in February remained below the pre-COVID-19 levels, the German Retail Association said earlier in the month. Private consumption would "not be a growth driver for the economy in the coming weeks. Consumers will remain cautious for the time being."
Also on Friday, Destatis said that the financial deficit of the general government in 2023 was down 9.5 billion euros (10.3 billion U.S. dollars) from the previous year. However, the deficit "remained high," amounting to 87.4 billion euros, according to provisional calculations.
The central government's financial deficit decreased sharply as measures aimed at mitigating the impacts of the coronavirus pandemic and the energy crisis came to an end, Destatis said.
For 2024, the German government is only expecting a 0.2 percent growth in GDP. "We are emerging from the crisis more slowly than we had hoped," Economy Minister Robert Habeck said when presenting the annual economic report earlier this week.
In the context of a weak global economy, high interest rates, and a lack of skilled workers, Germany was also "suffering from structural problems that have built up over many years," Habeck stressed. "What we need now is a reform booster."
Germany's Chamber of Commerce and Industry indicated that the country's economy would slip deeper into recession. Last week, it forecasted a 0.5 percent decline in economic output for 2024. (1 euro = 1.08 U.S. dollar) ■